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Transcript

Property Market Reality Check · The Property Unleashed Podcast

0:00
SPEAKER_01: Hello and welcome to this month's Lettings and Property Update.
0:04
SPEAKER_01: I am joined by Anthony McMullen from Homemaker Properties.
0:07
SPEAKER_01: Great to have you on.
0:08
SPEAKER_01: As always, Anthony, how are you?
0:10
SPEAKER_00: Partner, fantastic.
0:12
SPEAKER_00: What I wanted to do and what I'm trying to do, and hopefully, this will be something rather than just dribble on about experiences and all these different things of what we've been going on.
0:22
SPEAKER_00: What I want to do is try and talk about hot to trot subjects that the market is happening at the moment.
0:27
SPEAKER_00: So what I've been looking at is some subjects that have been news articles that have come out over the last 24 hours.
0:34
SPEAKER_00: Now, I apologize already, they may not be quite as uplifting as we would like them to be.
0:38
SPEAKER_00: However, there are things that you need to be aware of in discussion.
0:41
SPEAKER_00: Obviously, if we can have a discussion between the two of us.
0:43
SPEAKER_00: So we've got three different subjects that one positive one.
0:48
SPEAKER_00: And two kind of heavy ones that we're going to look at.
0:50
SPEAKER_00: So one of them is the housing market as far as remains resilience.
0:53
SPEAKER_00: There you go, that's a positive.
0:55
SPEAKER_00: Despite the first price drop since 2023.
0:58
SPEAKER_00: Second one we're going to talk about is HMRC, and then all of a sudden becoming a bit of a bit entrepreneurial.
1:04
SPEAKER_00: How can we make more money?
1:05
SPEAKER_00: Yay! Other than increasing taxes, what's it going to do anyway?
1:09
SPEAKER_00: And the third subject we're going to talk about is the student rental league table.
1:13
SPEAKER_00: How's things looking as far as yields are concerned?
1:16
SPEAKER_00: And then what I'll try and do at the end is give you an idea from a letting agency how the marketplace has changed, how the dust is settling after the Renters Riots act that we've all had introduced a couple of months ago.
1:31
SPEAKER_00: So we're going to start with the housing market remains resilient despite the first price drop since 2023.
1:38
SPEAKER_00: Now, that sounds a big headline, doesn't it?
1:41
SPEAKER_00: But 0.2% really is that really a big big drop?
1:47
SPEAKER_00: £100,000 house, that's£200.
1:50
SPEAKER_00: £200,000 drop, that's£400.
1:53
SPEAKER_00: £300,000, that's£600.
1:56
SPEAKER_00: Wow.
2:00
SPEAKER_00: It's not even worth talking about.
2:02
SPEAKER_00: This is a big headline.
2:03
SPEAKER_00: I I see this so often.
2:05
SPEAKER_00: Um news articles, you can tell they're trying to get big, big stories because they've not got much else to talk about.
2:12
SPEAKER_00: That's all I can think about.
2:13
SPEAKER_00: However, there's a number of different things that were highlighted in here.
2:19
SPEAKER_00: In my opinion, the marketplace has been fairly subdued for a couple of years now.
2:23
SPEAKER_00: In particular, investment properties.
2:25
SPEAKER_00: Residential properties, if you're in strong marketplaces and string, strong locations, for example, in schools, attractive locations, there's still going to be steady increases in those values because people will pay what they're willing to pay for because of the benefits that it will have.
2:39
SPEAKER_00: For example, if you want to, I'll tell you a property quite recently, we're letting at the moment that's going to go very quickly.
2:45
SPEAKER_00: The landlords put the increase in rent quite significantly, but it's near a school that's a very in-demand school.
2:51
SPEAKER_00: And we know what the funny thing is, we have parents that will go and actually pay the rent for that particular property.
2:55
SPEAKER_00: I never forget we had a HMO quite nearby recently.
2:58
SPEAKER_00: I'm going to rent that room.
2:58
SPEAKER_00: I'm not going to live in it.
2:59
SPEAKER_00: I'm just going to rent it just so I've got an address nearby so I can apply for my son to go to that school.
3:04
SPEAKER_00: Incredible.
3:06
SPEAKER_00: But what we're finding is as far as values are concerned, there's a number of different things that are impacting upon.
3:14
SPEAKER_00: So, for example, in an investment property, an investor will say, This is what I want to achieve.
3:19
SPEAKER_00: And I say, Okay, well, realistically, I can see why you're thinking that and looking at different sales.
3:25
SPEAKER_00: But do you then say, okay, well, if an investor comes along and you've got tenants in situ, what's the rent that you're achieving?
3:30
SPEAKER_00: And I'd say X amount.
3:32
SPEAKER_00: I say, right, well, if I'm now looking to buy this as a property, the price you're looking at, the mortgage is going to cost X.
3:39
SPEAKER_00: Your rent isn't 135% or 140% of what the mortgage is.
3:46
SPEAKER_00: So there's no way around that you're going to be able to do that.
3:50
SPEAKER_00: Yeah, I hadn't thought of that.
3:51
SPEAKER_00: I was like, right.
3:52
SPEAKER_00: I says, in addition, how long have you had your tenants in situ?
3:55
SPEAKER_00: And they says, Oh, we've had the tenants in situ now for over a year.
3:58
SPEAKER_00: I says, right, that gives you the facility into the Rentals Rights Act to give them four months' notice.
4:02
SPEAKER_00: Because I'm just in the process of listing a property at the moment for an investor who wants a good price.
4:07
SPEAKER_00: And I say, look, as an investment opportunity, the numbers don't work because you're trying to get a premium price for and in a great location, all these different positives, but the numbers don't add up.
4:19
SPEAKER_00: So you do have that option where you can give the four months notice to an investor to the tenants.
4:24
SPEAKER_00: Once you've firmed up all the different things there, with regards, you've got proof of funds, proof of proof of lender being able to lend.
4:32
SPEAKER_00: A mortgage offer can take quite a while.
4:34
SPEAKER_00: And because you've got to give four months' notice, you want to give that notice as soon as you're able to to your tenants.
4:39
SPEAKER_00: But here's the thing: the benefit, they could give you two months' notice at any point during that four months.
4:43
SPEAKER_00: So I'll be honest with you, the length of time sales are taking at the moment, four months isn't a bad notice period.
4:52
SPEAKER_00: I wish it was three, but four months isn't a bad period because sales are taking longer.
4:57
SPEAKER_00: No matter how amazing the solicitors can be, different fluctuations of this, that, and the other are impacting upon that.
5:03
SPEAKER_00: But do remember the key fact, once you've issued that four-month notice, if that sale falls through, you can't relet that property to somebody else.
5:12
SPEAKER_00: If the tenants are in situ, you may get lucky, they may not have given you notice.
5:15
SPEAKER_00: They may able to say, I'll stay then, great.
5:17
SPEAKER_00: And just wait till you, you know, you've all of a sudden been able to.
5:21
SPEAKER_00: But do remember that.
5:23
SPEAKER_00: So sale prices, but in a lot of cases with residential properties, vendors are sitting tight and waiting to achieve the price they want to achieve, rather than dropping their pants on prices.
5:33
SPEAKER_00: But there's a number of different things that are causing uncertainty for us all, inflation, the cost of living, the global, uncontrollable things that are happening that are impacting upon our affordability, all these different things.
5:46
SPEAKER_00: Because there's, you know, there may not be as many people moving, you'd think, well, that's economies of scale, there's less properties to buy.
5:51
SPEAKER_00: Well, no.
5:52
SPEAKER_00: Lots and less people are moving, lots and less people are because of that, they're sitting tight.
5:56
SPEAKER_00: Homeowners aren't cutting prices, but there's a resilience in the marketplace as far as lettings is concerned, because rents are still going up, they're still very strong on that side of things, but less people are then selling, unless they're in the circumstances, their stage of life where they've just said, look, the property's made the money for me.
6:14
SPEAKER_00: Let's just get what we can for it.
6:17
SPEAKER_00: Um, whether they've got no mortgage or they've got a you know a low loan-to-value mortgage on there, there's a whole array of different things, but it's a resilient marketplace.
6:25
SPEAKER_00: I very much say that, and affordability is still slightly improving.
6:30
SPEAKER_00: I mean, the lady from Skipton Group, as far as that's concerned, she's affordability.
6:34
SPEAKER_00: She started that many first-time buyers admittedly remain under significant pressure, but housing costs are continue to increase, and in a lot of cases of residential buyers, it's difficult, but for investor buyers, the numbers don't add up.
6:47
SPEAKER_00: So different people are looking at different strategies, whether they're looking at um lease options, for example, where they'll buy it at some point in the future, or protected lease purchase, or they're looking at flips, but they're few and far between where those numbers add up as well.
7:03
SPEAKER_00: So bridging finance and all these different things are impacting because you may all say, Oh, I'm gonna do a flip, brilliant, I'll buy, do it up, and I'll do it on bridging finance, but then the certainty of what that's gonna be worth at the end with the way the marketplace is at the moment.
7:18
SPEAKER_00: And I know I remember going out with the mortgage of surveyor on the property, and they came out and they said, I haven't, I need to make sure I've got sufficient proof for the value you want to achieve, and there's not as many transactions nearby of this profile for me to do it.
7:34
SPEAKER_00: I haven't to go further and far between, which doesn't give me the confidence I'm gonna be able to give you the value you need to get.
7:41
SPEAKER_00: So sorry, there's all these different negative things that are happening, but the next few months, um, if mortgage rates broadly stable, the confidence continues to improve, we could have you know some momentum.
7:54
SPEAKER_00: Affordability remains the defining you know constraint on things, and that's gonna be not just for residentials but for investors as well.
8:02
SPEAKER_00: So it's an uncertainty, and obviously, with regards to the the mortgage market, it's been pretty stagnant, the stamp duty's there.
8:11
SPEAKER_00: But I mean it it's and there's also additional legislation that's coming.
8:16
SPEAKER_00: I mean, gosh, I had an investor come to me yesterday.
8:19
SPEAKER_00: He says, Brilliant! So I've got a property, it's a shop downstairs.
8:22
SPEAKER_00: I says, right, that's nice and easy.
8:24
SPEAKER_00: He said, but I've then got three on sweet bedrooms upstairs in a flat.
8:27
SPEAKER_00: I said, Oh, brilliant, okay.
8:29
SPEAKER_00: When did you do the refurbishment?
8:30
SPEAKER_00: Oh, I did it quite recently.
8:31
SPEAKER_00: I says, okay.
8:32
SPEAKER_00: So do you get planning?
8:34
SPEAKER_00: No.
8:34
SPEAKER_00: Has it got building rent?
8:36
SPEAKER_00: No.
8:37
SPEAKER_00: I says, have you got a HMO licence?
8:39
SPEAKER_00: Because it's three students.
8:40
SPEAKER_00: No.
8:41
SPEAKER_00: I was like, well, you can't sell it then.
8:43
SPEAKER_00: He says, why not?
8:43
SPEAKER_00: I says, well, do you think a solicitor's going to advise their investor to buy your property because it's not got planning?
8:48
SPEAKER_00: We've got Article 4.
8:50
SPEAKER_00: You've not got a HMO licence, you've got three students living there.
8:53
SPEAKER_00: I says, right, I'll do the sums based on as a residential home for you.
8:57
SPEAKER_00: And this is the thing, people don't know what they don't know.
8:59
SPEAKER_00: I know that, but when there's there's a whole array of different things.
9:04
SPEAKER_00: But I've looked at the way that prices have changed over the last couple of years, and it's been neither here nor there.
9:12
SPEAKER_00: But the price that a surveyor will value a property for a mortgage is different to what someone will pay for it.
9:19
unknown: Yeah.
9:20
SPEAKER_00: And the way that I've I've had a lady come to me with six properties Thursday last week, and I did a best price guise for her yesterday, and I then did the return on investments, and they were only single-let properties, guessing decent enough rents, but they were hovering in around the 5%, 6% return on investment year one.
9:41
SPEAKER_00: Now that's okay, but it's not going to get you excited.
9:45
SPEAKER_00: I says, you know, realistically, having done this analysis, your best bet in a lot of cases, you've got that option.
9:53
SPEAKER_00: Sell it tenanted.
9:55
SPEAKER_00: You may well have a portfolio buyer, investor, maybe.
9:59
SPEAKER_00: But the likelihood will be you need to sell it to residential homeowners that are going to live there rather than an investor.
10:07
SPEAKER_00: Because those numbers, when you do your stamp duty calculations, oh gosh, head spinning on some of the values that we're having to spend out on stamp duty.
10:15
SPEAKER_00: Your solicitors,£1,500, yeah, you deposit at 25% loads of value.
10:21
SPEAKER_00: Mortgages, I'm tending to put them at about 5%, which is around that sort of mark there, is what you'd be paying on an interest or 75% loan to buy your mortgage.
10:28
SPEAKER_00: That's your return investment.
10:30
SPEAKER_00: But then I then look at the stress test that someone will do on what rent's coming in in comparison to the mortgage, and they may not come in as well.
10:36
SPEAKER_00: So there's many hurdles you have to jump over, no matter how lovely a property is, that's uh making it difficult.
10:43
SPEAKER_00: I'm not sure whether you've had any experience of anything similar.
10:46
SPEAKER_00: You've been speaking to other investors of the similar, similar problems they're coming across.
10:50
SPEAKER_01: Well, what you said there resonates because I think sometimes we need to take our investor hat off and just think our property, whilst it might have been an investment property, might be great for a first-time buyer.
11:00
SPEAKER_01: Do you know what I mean?
11:01
SPEAKER_01: And almost cater for that market.
11:03
SPEAKER_01: Yeah.
11:03
SPEAKER_01: So it's like if you're gonna get vacant possession, somebody's gonna want to move into it.
11:07
SPEAKER_01: It's not just I'm just gonna sell this because I was an investor, I bought as an investment, somebody will buy it as an investment.
11:13
SPEAKER_01: There's a lot of first-time buyers out there now with a lot of sort of properties that investors have that do suit that criteria.
11:19
SPEAKER_01: And I I do think if you got to market it right, in the sense that you it you need to help to sell it as well.
11:25
SPEAKER_01: Um, and one of the things I've said at the moment with the market, now, not everybody's obviously, I mean, we're we're quite good at talking at the end of the day, you know what I mean?
11:33
SPEAKER_01: But not everybody is as good as that.
11:34
SPEAKER_01: But what I always try and and and you know, if I if I was talking to you, Annie, I'd say at the end of the day, if you're gonna do some like block viewings to sell a property, I suggest you be there as well as the owner of the property, so you can talk about it.
11:46
SPEAKER_01: Because I've always found myself that at the end of the day, property is all about sales, you know, you're either selling to tenants to get them in there, or you're selling to get rid of the property, or you're selling to do a deal.
11:57
SPEAKER_01: So you need to get good at talking to people.
11:59
SPEAKER_01: And I think if you can go in there and give them a bit of a personal touch as well as the agent, some sometimes not everybody's got that.
12:06
SPEAKER_01: So, you know, if you're if you're a bit of an introvert or you're just not a happy person, don't bother.
12:11
SPEAKER_01: Leave it to the leave it to the actual company to do it for you.
12:14
SPEAKER_01: But if you can go there and give it that personal touch, I think in the market at the moment, it really does help that, but keep an open mind as to your area, your demographic, what is in the area.
12:24
SPEAKER_01: Is this an investment property all day long because no nobody wants to live in the area, so to speak, or is it a fact that no, I really think you know a couple or a family are going to take this on.
12:33
SPEAKER_01: So let's market it in that manner as well.
12:35
SPEAKER_01: And I think I think that's a big thing at the moment because the market is so slow.
12:40
SPEAKER_00: Yeah, it's yeah, yeah, yeah.
12:42
SPEAKER_00: There's there's many different variables that on the face of it you think, so of course we'll want this.
12:48
SPEAKER_00: And I was like, well, the way that I turned it around to the lady and I've done this with the number of investors now.
12:52
SPEAKER_00: I was like, right, here's the numbers.
12:54
SPEAKER_00: If you were the investor now, would you buy it?
12:57
SPEAKER_00: Yeah.
12:57
SPEAKER_00: No.
12:57
SPEAKER_00: I was like, well, there you go then.
12:59
SPEAKER_00: That's this is this is where it is.
13:01
SPEAKER_00: The the ideal situation is you sell it tenanted, so you get your rent until day, you know, the day of completion, and you've got no worries on your mortgage, if the mortgages, admittedly, for this particular I don't think she had finance on this particular property, so it's wonderful.
13:14
SPEAKER_00: I was like, right, you've got and the gentleman who's got this other property up the road from here as well, who are just in the process of writing his details to him at the moment.
13:21
SPEAKER_00: I said, You've got a very saleable asset in a prime location that, yes, if it had a HMO license for this particular property, it's less as a single app, it's probably getting good rent, but the numbers don't add up.
13:34
SPEAKER_00: I says, would you pay, would you, would you want to get 3% return on investment?
13:37
SPEAKER_00: No, of course you wouldn't.
13:39
SPEAKER_00: As lovely a house as it is, but as a residential buyer nearby to Hersell Common, you know, a love is it's it's a prime location, it will increase in value, it will maintain its value at least anyway, um, until things start momentum subscribing again.
13:52
SPEAKER_00: It's just looking at things a different way and just saying, I I think the headset of anybody selling an investment property now is look, it's made you money.
14:00
SPEAKER_00: Yes, you've had your money, get what you can back out of it.
14:03
SPEAKER_00: And even if you have to sell it for the same price you bought it for 10 years ago, eight years ago, seven years ago, six years ago, even if in particular if you bought it five years ago, because at the moment, you've uh just before Stamp Duke, just before COVID or just after 2020, since then, things have been very stagnant.
14:20
SPEAKER_00: And yes, it may fluctuate like this.
14:21
SPEAKER_00: And I know Alison's in the process of writing a presentation we're doing tomorrow, and the way that prices have changed over a year, it's uh this type of profile's gone up by 2.9 million.
14:32
SPEAKER_00: But you know, you look at the amount it equates to, it's neither here nor there.
14:37
SPEAKER_01: And I think as well, it's you've got to think you might have bought the property 10 years ago at very much very different interest rates.
14:43
SPEAKER_01: Oh now wonderful.
14:46
SPEAKER_01: Obviously, capital growth, you might have had that, it might be stagnant, but you know, it might have gone up a bit.
14:50
SPEAKER_01: But people are buying it now at different interest rates, and a deal that stacked, you know, five even five years ago, a deal that stacked really.
14:57
SPEAKER_01: I mean, I was looking predominantly at single lets more five years ago for my portfolio because I just thought it's good, the interest rates were low at the time, it stacked up, park park them and forget, basically.
15:09
SPEAKER_01: And then, of course, we always knew it would happen, but you you never really know exactly when, and of course, interest rates have gone up now.
15:15
SPEAKER_01: And I I'll try and get a single let to really stack or to make any decent money is near enough impossible unless you can get it at a really cheap price when you when you're buying it and add the value.
15:26
SPEAKER_00: Here's one thing my dad's got a portfolio of properties that something happened to him the other day.
15:30
SPEAKER_00: Obviously, the lender for a number of his properties had been notified obviously that the property was being sold, and there was a nice bit of equity in the sale.
15:40
SPEAKER_00: So he was looking forward, and that money was being spent on X, Y, and Z already.
15:43
SPEAKER_00: However, he only got half the money, the other half was used to pay off some of the lending he had against his portfolio to reduce the loan to value.
15:56
SPEAKER_00: That wasn't a a case of any of it, whoa, whoa, whoa, whoa, you didn't tell me that.
16:00
SPEAKER_00: What what what's what's well well no, because this is what you know to reduce your exposure.
16:05
SPEAKER_00: Well, but they're but they're all where they need to be.
16:08
SPEAKER_00: They're all you know, higher loan to value or better loan to value than they were when you first did the finance.
16:12
SPEAKER_00: So why do you need to get lower loan to value?
16:14
SPEAKER_00: I don't understand.
16:15
SPEAKER_00: That's the company process, and he's argued and argued and argued, but he got half the money he was hoping to get from the sale of this particular product.
16:22
SPEAKER_00: I said, Look, all it's doing is kicking the whatever it is down the road.
16:25
SPEAKER_00: I says, all it'll mean is when it comes later down the line of refinancing or whatever it may well be, selling virtual future assets.
16:35
SPEAKER_00: It just means you just have to wait to get it.
16:37
SPEAKER_00: Put it as savings, think of it positively.
16:39
SPEAKER_00: He was like, but I had it, I was going to use it for such a dad, there might be still there, and it's still there, it's just not in his hands now.
16:47
SPEAKER_00: That holiday, what's it called?
16:48
SPEAKER_00: But it's not gonna happen now.
16:50
SPEAKER_00: So okay, so moving on to HMRC, they're becoming a bit entrepreneurial.
16:55
SPEAKER_00: This this this up, bloody hope so.
16:58
SPEAKER_00: I says you're the biggest, uh one would assume the the superpower as far as business is concerned.
17:03
SPEAKER_00: So basically, they're preparing huge tax clampdown on the property sector.
17:08
SPEAKER_00: So here's the thing uh that that they are looking at different ways of raising money.
17:14
SPEAKER_00: So, as far as a law firm that said HML HMRC is targeting property industry for up to 645 million in additional tax.
17:25
SPEAKER_00: That's a 40% increase on the 461 million figure that they did in 2024-2025.
17:30
SPEAKER_00: So you're thinking, wow, okay, so the international law firm BCLP have done this analysis.
17:35
SPEAKER_00: So basically, what's happening is they're looking at different ways in which they can make more money.
17:42
SPEAKER_00: Though, yes, of course, are they gonna do taxes?
17:44
SPEAKER_00: Don't tell me she's not you're gonna find another way of taxing someone somewhere or doing that.
17:48
SPEAKER_00: However, the avenue they're looking at, they're increasing compliance officers by 5,500 officers by 2030.
18:00
SPEAKER_00: So they've already hired 1,600 compliance officers in the 2025-2026.
18:05
SPEAKER_00: However, that's gonna go up to 5,000.
18:07
SPEAKER_00: So what they're trying to do is make sure that everything is compliant as it possibly can be.
18:14
SPEAKER_00: So the rise, you know, in tax under consideration is consistent with the additional resources HMRC.
18:19
SPEAKER_00: So basically, they're looking to raise more money by making sure people are doing things and doing things right.
18:24
SPEAKER_00: So this is going to be on stamp duty in particular, and a number of other areas, stamp duty in the real estate sector, scrutiny on capital allowances, and stamp duty in the real estate sector.
18:35
SPEAKER_00: So the reason why I read that and I thought, oh, now then, that sounds familiar because Coventry City Council, if you look it up, I'm pretty certain they are one of the compliance kings as far as the amount of money they have charged people for not doing things right as far as planning in particular, but H-modalizing compliance, I think it was over like five or six hundred thousand pounds Coventry Council had bought in from compliance on people that weren't doing and doing things right.
19:06
SPEAKER_00: I know that the council brought in a number of different things.
19:09
SPEAKER_00: So, for example, the Commentary Landlord Accreditation Scheme they bought in, and they said, right, if you aren't registered and you are a accredited Commentary Company Accreditation Scheme, your HRO license is going to cost you£1,200 and we're going to give you a one-year license.
19:26
SPEAKER_00: However, if you come and do our free course, give us all the information about your portfolio, and you are a creditor, you apply, which is free to apply.
19:34
SPEAKER_00: It's a couple of hour course, and you do it on your laptop, you'll get a five-year license potentially for a thousand pounds.
19:43
SPEAKER_00: I'm like, okay, so I can pay six grand or a thousand pounds for five-year license.
19:47
SPEAKER_00: I know which one I'm going to do.
19:49
SPEAKER_00: So they're incentivized, but then it means they've got almost like the control, the power, and the fact of that they then have all your data to a degree.
19:56
SPEAKER_00: But what they're then making sure is that if they then come out and do the inspection, they'll then ask you to do XYZ as part, for example, your HMO license.
20:05
SPEAKER_00: And if you haven't done it and you still don't do it, they'll then fine you for doing that.
20:10
SPEAKER_00: Or if they find you haven't got a license and you should have a license.
20:13
SPEAKER_00: And I know a trip hurdle that they had because additional licensing in Coventry is Section 257 HMOs.
20:19
SPEAKER_00: Because a lot of properties that didn't need HMO licenses in the past, they just had safety certification, which is separate flats or separate studios in one building, had you know, all safety certification, all the different things it needed to do, but they hadn't realized they needed a Section 257 HMO licence.
20:35
SPEAKER_00: I didn't realise they needed to do that.
20:37
SPEAKER_00: Okay, we need to get one, and they don't do it, and all of a sudden they get fine.
20:40
SPEAKER_00: They've got you know orders against them, banning orders, um a whole array of different things, but it's it's piling up this big stack of cash for Coventry Council.
20:51
SPEAKER_00: So this to a degree is echoing what the government are looking, or HMRC are looking to do here is the fact of we're looking to tighten up there's angles and avenues that different people may be exploiting to ensure that the government don't get all the money that they want to get, or the HMRC want to get.
21:10
SPEAKER_00: And what they're doing is then employing more staff to ensure that they want to, you know, greater amounts of capital allowances and stamp duty for review.
21:18
SPEAKER_00: They're wanting to basically build more things under consideration.
21:22
SPEAKER_00: I mean, HSMA's increasing unwillingness to provide clarity as well, which is another headache of the fact if you call them up, you'll sit and wait and hold for an hour, and you'll ask them for questions on X, Y, and Z, and they won't give you an answer.
21:35
SPEAKER_00: These are these are these are things that obviously are being reported in this particular article.
21:38
SPEAKER_00: And I'm just like, and then all of a sudden they'll come and they'll demand such and such, you'll appeal and they'll say no.
21:44
SPEAKER_00: They'll give you a one paragraph responsible, no.
21:46
SPEAKER_00: So yes.
21:49
SPEAKER_00: I think in some ways, if people are doing things and doing things correctly, it's not going to impact upon you.
21:56
SPEAKER_00: Simple as that.
21:57
SPEAKER_00: However, the minority People that may well not be doing things as they should be are going to be exploited and it's going to generate more money.
22:06
SPEAKER_00: But it happens in a lot of cases, the majority penalised for the minority doing any breaches.
22:12
SPEAKER_00: But this is something that's going to happen, and it's going to be something that are going to basically make things as compliant as compliance could be.
22:18
SPEAKER_00: But as long as you're doing things and doing things right, and you're paying what you should be paying, it is what it is.
22:25
SPEAKER_00: However, I've got a feeling there may will be several avenues that may want to be exploited as well as other avenues that are going to impact upon us all as well.
22:33
SPEAKER_01: Well, yeah, we'll have to watch this space on that one, won't we?
22:36
SPEAKER_00: Stamp duty is a killer as it is already, admittedly, for investors.
22:40
SPEAKER_00: The olden days of buying a£250,000 property and having 10,000 stamp duty is wonderful as it used to be for an investor.
22:47
SPEAKER_00: However, that's an awful lot more as it used to be.
22:49
SPEAKER_00: And obviously, then when you go above the different ledge, uh you buy 300,000 pounds, 350,000 pound houses, the stamp duty is wow.
22:58
SPEAKER_00: And all of a sudden you then do your ROIs and all these different things, and you're like, nope, it does work.
23:06
SPEAKER_00: And properties only worth what someone will pay for it.
23:08
SPEAKER_00: And I think the mindset of investors that are selling properties now needs to be very much you've had your money, you've had your benefit.
23:16
SPEAKER_00: Get what you can from it if you want to move on and get the equity out of it that you can, rather than trying to you'll sit there for a long, long time.
23:25
SPEAKER_00: Uh, and I know a number of my investors that and Alison comes to me, she says, Anthony, we've had it on the market for too long if a sale.
23:32
SPEAKER_00: I was like, I know.
23:35
SPEAKER_00: But I keep on saying I need to reduce the price, but he doesn't want to.
23:39
SPEAKER_00: And I'm like, what do we take off the market?
23:41
SPEAKER_00: Then all of a sudden, we'll have a little flutter of investors that'll come along and want to buy it.
23:47
SPEAKER_00: And it then turns out that Natasha says to me, She says, Oh, now they're resident buyers.
23:52
SPEAKER_00: Is it easy willing to do it vacant possession?
23:54
SPEAKER_00: Of course he is.
23:55
SPEAKER_00: I was like, fine, and that that's that's that that's a very changing rather than lots of investors coming.
24:02
SPEAKER_00: And what I'm finding is a lot of investors are exploring different avenues to gain properties.
24:07
SPEAKER_00: Obviously, you've got your rent to rents to get cash flow, lease options, protected lease purchases, ways in which they're again kicking the tin down the line, they're exposing themselves to the fact that they're gonna make sure they're gonna buy it at such and such a point in the future.
24:19
SPEAKER_00: However, they've got five years of potential growth or four years or three years of potential growth before they'll then say they'll buy it.
24:26
SPEAKER_00: But hey, all sorts of different avenues.
24:29
SPEAKER_00: Anything you wanted to discuss further on that one before I go on to the next one?
24:33
SPEAKER_01: No, not really.
24:34
SPEAKER_01: I pretty much covered most things on that one.
24:36
SPEAKER_01: I mean, it's it's one of those things I think I think you know, governments are always gonna try and change things, bring things in, so are councils as well.
24:42
SPEAKER_01: We've just got to stay on top of it.
24:43
SPEAKER_01: And like I say, that's why it's great that we've got you know people like yourself and stuff that we're putting this information out there just to make people aware of it.
24:50
SPEAKER_00: But here's the thing as we've seen with some governments, what we're gonna do, we're gonna do this, and it's gonna be done by 2040.
24:57
SPEAKER_00: But I'm sat on a sunbed not working anymore.
25:01
SPEAKER_00: That's it, and it's just it's like saying HS2.
25:04
SPEAKER_00: I I've just had updates on that one.
25:06
SPEAKER_00: The fact of because I Alison was doing some research on it for the talk I'm doing tomorrow, and she's just like they're now pushing it down the line and saying it's not gonna be done for another 12 years.
25:16
SPEAKER_00: I'm just like, really?
25:20
SPEAKER_00: And that's another government and another government, another government.
25:22
SPEAKER_00: So, next thing I'm gonna talk about is that there's different marketplaces.
25:27
SPEAKER_00: Some people may well target tenants on universal credit and certain guarantees from councils, that's one that one marketplace, or you maybe will do family lets HMOs, and what are the HMO marketplaces targeting students?
25:41
SPEAKER_00: Now, one thing a lot of investors look on that and they think, well, banker mum and dad, they'll pay whatever they because if their son or their daughter wants to go, then they'll they don't mind, they're happy, they're safe, they're with their friends, all these different things.
25:54
SPEAKER_00: But a lot of people look around the country and they say, Right, where's a good place to environ?
25:59
SPEAKER_00: I'm really proud of the fact that I'm in covetry and it's one of the hot spots of loving that.
26:03
SPEAKER_00: But as far as the student markets, there's been, and and this is one website that I recommend your subscribers and your investors look at.
26:12
SPEAKER_00: It's called landlordtoday.co.uk.
26:15
SPEAKER_00: Loads, and that's where I've got these, some of these subjects that I'm talking to you about today.
26:19
SPEAKER_00: There's got loads of education articles on there, and one of the ones I've seen today, the student rental league table, so it's landlords yield strengthening.
26:30
SPEAKER_00: I was like, right, okay, let me dig into that.
26:33
SPEAKER_00: Let me see if they're fibbing or whether they're highlighting something exciting when it's not really that exciting.
26:38
SPEAKER_00: We shall see.
26:39
SPEAKER_00: But here's the thing.
26:41
SPEAKER_00: Unfortunately, commentary wasn't top, but it's in the top group, which is good.
26:45
SPEAKER_00: And there's a number of interesting points that came from this because people think to themselves, oh, they have to be in certain types of cities or certain establishments.
26:53
SPEAKER_00: So I think that the key phrase beer was Russell group institutions to be able to be achieving certain great yields.
27:02
SPEAKER_00: And no, you don't.
27:04
SPEAKER_00: Here's the thing that comes from that.
27:05
SPEAKER_00: So, Stoke on Trent, right in the middle, nearly in the middle.
27:10
SPEAKER_00: You can drive between the M6 and the M1 and go, and that's the M50.
27:14
SPEAKER_00: I can't remember the most ways.
27:16
SPEAKER_00: Anyway, Stoke on Trent, strongest yields, rental yields of the UK's university locations.
27:22
SPEAKER_00: Wow.
27:22
SPEAKER_00: And that was published by Paragon Bank, which is a very big lender.
27:25
SPEAKER_00: I'm not sure that that was the argument my dad was having with the lender.
27:28
SPEAKER_00: I don't think it was Paragon.
27:30
SPEAKER_00: It might be, but you don't have an argument with the lender, do you?
27:32
SPEAKER_00: Anyway, um, so this obviously serves two universities, the University of Staffordshire and the University of Kiel, recorded student property yields of 9.42% based on an average rent of 14,000 a year, just over, which is 1,185 per cab of the month, with a property value of 150,982.
27:52
SPEAKER_00: So here's the thing: you're looking now, what okay, so an average value of 151 grand, and you're coming out with 14 grand a year.
27:59
SPEAKER_00: And I was like, okay.
28:00
SPEAKER_00: So I then did the return and investment calculations on that.
28:03
SPEAKER_00: I was like, right, let me dig into this bad boy.
28:06
SPEAKER_00: Because I need to be realistic here based upon 6% voids, you've got your insurance, you've got your maintenance, obviously your mortgage based on a 5%, 75% load to buy your mortgage.
28:18
SPEAKER_00: So without a letting agency, if you bought that property at that price,£151,000, you're getting£14,000 a year.
28:26
SPEAKER_00: The return investment year one is lovely, 11.2%.
28:30
SPEAKER_00: However, get a letting agent involved, which in a lot of cases you're gonna want to do with student university students, it's 6.3%.
28:37
SPEAKER_00: Is that exciting enough?
28:41
SPEAKER_00: Not really.
28:49
SPEAKER_00: As was saying there, the key point they're trying to make here as far as the strong student property returns are not confined to cities with Russell Group institutions.
28:58
SPEAKER_00: So the findings highlight the breadth of the student rental market with competitive yields is across established regional cities and smaller university centers.
29:06
SPEAKER_00: So don't sit there thinking, I've got to go Leeds, go up to go to Leeds because you've got two big universities up there.
29:12
SPEAKER_00: However, this league table is saying the average properties in known student postcodes generate average yields of 7.32% compared to 6.86 for non-student postcodes.
29:23
SPEAKER_00: So here's the thing: the marketplace is changing.
29:26
SPEAKER_00: People are saying about the whole residential HMO, all yes, the days when you could buy HMO in non-Article 4 cities, convert it into five-bed HMOs, return investment year one, 20% with the crazy low interest rates and the crazy low stamp duties, and not having to have it in a limited company, long gone.
29:47
SPEAKER_00: That isn't happening anymore.
29:49
SPEAKER_00: So, top of this list was Stoke.
29:51
SPEAKER_00: So, as I said, their yield was 9.42%, 14,000 pounds average rental income at 150,000 pounds.
29:58
SPEAKER_00: Second was Plymouth.
29:59
SPEAKER_00: And here's a key factor, right?
30:02
SPEAKER_00: Their average rental income in Plymouth was 35,000.
30:05
SPEAKER_00: That's 20,000 pounds more than Stoke.
30:08
SPEAKER_00: However, average valuation 380k.
30:14
SPEAKER_00: So you flip that on its head, you've got to spend an awful lot more, but you're getting the same.
30:20
SPEAKER_00: So on a positive day, you could spend less, but your rental caps in different locations are going to fluctuate.
30:26
SPEAKER_00: So as far as I did uh I did the review on Coventry.
30:28
SPEAKER_00: So Coventry was just under£29,000 average rental income.
30:32
SPEAKER_00: However, they're saying£355,000 was the minimum fee you have to pay.
30:37
SPEAKER_00: 8.16%.
30:38
SPEAKER_00: So the return on investment without a letting agency was just below 10% if you're self-managing, and just below 6% with an agency.
30:47
SPEAKER_00: Now the top five average rental incomes across the country, Exeter was top, York was second, Portsmouth third, Leeds fourth, Durham fifth.
30:58
SPEAKER_00: So you're looking again, please look this article up.
31:02
SPEAKER_00: As I said, it's on the Landlord Today website.
31:05
SPEAKER_00: But it's just interesting to see how different cities are doing.
31:10
SPEAKER_00: And it's really eye-opening the fact of the valuations of properties, but then what rents are being achieved and how they correlate between the two.
31:19
SPEAKER_00: But then you go to different cities and you're getting a house for pittance, but your rent is naff all in comparison as well.
31:28
SPEAKER_00: And the different caps you're going to be able to do.
31:30
SPEAKER_00: But then going out of places you don't know and buying in certain places.
31:35
SPEAKER_00: Because I mean, for example, people come to me and bought, if they bought in Coventry 10 years ago, we didn't have all the student halls that we've got in the city at the moment.
31:44
SPEAKER_00: There used to be, you know, I think the census in 2011, there were 10,000 student beds between Coventry and Warwick University, with a common population of probably 50 to 60,000 students.
31:56
SPEAKER_00: I was like, wow, it's a killer.
31:57
SPEAKER_00: No article four, no additional license.
32:00
SPEAKER_00: It was like three for all.
32:01
SPEAKER_00: However, there's now about 30,000 beds, probably between the two universities, 60,000 students, so you've got half the population covered there.
32:10
SPEAKER_00: But in addition to that, there's no ability to now change your C3 residential into a C4.
32:15
SPEAKER_00: If you're going up to a Sui Genras, potentially you could get the planning.
32:19
SPEAKER_00: But they bought Article 4 in because they think there's too many HMOs in the city.
32:23
SPEAKER_00: No, there's not.
32:24
SPEAKER_00: They bring so much more business to so many areas and all the different things.
32:28
SPEAKER_00: But hey, uh the voters are the people apparently they need to appease.
32:33
SPEAKER_00: But the the the the change now with the way of the stamp duty, the interest rates, the smaller HMOs, the numbers don't work.
32:42
SPEAKER_00: Unless you bought them 20 years ago, the numbers don't work.
32:45
SPEAKER_00: Um so on that basis, the bigger HMOs, the five beds, the six beds up to C4, six tenants in there, or Siri Genris, the number the only way the numbers work.
32:55
SPEAKER_00: However, the residential family lets for three-bed and four-bed, those rents, as was pointed out there, are tightening in comparison between the two.
33:07
SPEAKER_00: I mean, I'll give you an example if someone buys a three-bedroom premium location property for two to 250, they're getting 1300 pound rent per calendar month, no bills, low maintenance, no license, no, all the other agro that goes with HMO.
33:23
SPEAKER_00: I'm not saying that they're not good, gosh, a good significant proportion of our properties that we manage are HMOs.
33:29
SPEAKER_00: However, new investors come into the marketplace.
33:32
SPEAKER_00: HMO route isn't quite so yes, as fruitful as it could have been.
33:38
SPEAKER_00: As far as students are concerned, there's more population, obviously, that are going into the student halls in year one in particular, and then maybe we'll be year two.
33:47
SPEAKER_00: But here's another fact I'll open up to you about as well the student halls that aren't full.
33:53
SPEAKER_02: Yeah.
33:53
SPEAKER_00: So because of that, the owners are then applying for permission to put non-students in them and offering them, oh, you've got a cinema, you've got a gym, you've got a swimming pool, you've got tennis courts, you've got a football, and give you cash because they're desperate, because in some cases they aren't full.
34:13
SPEAKER_00: But in a lot of cases, you know, a lot of people think, well, I could live with four of my mates in a five-bed HMO, an awful lot cheaper.
34:21
SPEAKER_00: So they're having to drop their prices.
34:22
SPEAKER_00: So it's a very competitive market with regards to that.
34:26
SPEAKER_00: And students' marketplace can be an avenue, but in a lot of cases, if you've got higher-end, higher location properties, you want to get the higher rents, it'll go to master's students, it will go to postgraduate scheme students, young professionals, and because of the cost of living crisis, people may well say, right, well, I could have a flat that'll cost me£700, plus the capsule tax, plus the bills.
34:51
SPEAKER_00: Or I could go into a HMO room that'll cost me£700, all the bills included.
34:56
SPEAKER_00: I've got my own ensuite, I've got to share a kitchen, but I can take it back to my room, and that's the steps that people are taking.
35:03
SPEAKER_00: There's still very strong prices.
35:05
SPEAKER_00: I know that we've um got a number of HMOs, we've been doing section 23s quite recently, and they're pushing them up£20,000,£30 a month.
35:14
SPEAKER_00: Tenants aren't issues, you know.
35:16
SPEAKER_00: Then you've got six rooms at£30 a month,£180 a month extra times up by£12.
35:21
SPEAKER_00: Oh, that looks rather nice.
35:22
SPEAKER_00: £2,000 something extra.
35:24
SPEAKER_00: What have you done extra?
35:25
SPEAKER_00: Nothing.
35:27
SPEAKER_00: And if you've got five-year fixed mortgages that were in place, all these different things.
35:32
SPEAKER_00: So lots of positives.
35:34
SPEAKER_00: What I'll move on to now is as a letting agency, a state agency, how have things been changing or how things progressed, in particular the Renters Rights Act, how has that impacted upon?
35:49
SPEAKER_00: So going back probably 18, well, start of 2020, what have we been 26 now, 25, end of 2024?
35:59
SPEAKER_00: As a lettering agency, I looked at the number of lets that were happening the previous couple of years.
36:04
SPEAKER_00: The portfolio we were gaining as many as we were losing as far as landlords that were going out of the industry, whatever it was.
36:09
SPEAKER_00: So the number of the size of portfolio we had was pretty consistent.
36:13
SPEAKER_00: But the number of lets was pretty consistent as well.
36:16
SPEAKER_00: However, at the start of last year, all of a sudden we noticed a significant amount less of people moving.
36:24
SPEAKER_00: Now, renters writes that could have had a contribution potentially, but cost of living was also impacting upon that.
36:33
SPEAKER_00: Now, as far as landlords were concerned, they were divided.
36:35
SPEAKER_00: Rents were still good and growing, voids were lower, very happy.
36:39
SPEAKER_00: However, the new here's my shiny new property into let there wasn't as many people moving.
36:46
SPEAKER_00: And the number of people moving to reduced by about 25%, which was that that's the number of new people moving into properties.
36:54
SPEAKER_00: So the number of lets that we had occurred reduced by that many people.
36:58
SPEAKER_00: Voids was fantastic.
37:00
SPEAKER_00: We were delighted on that side of things.
37:01
SPEAKER_00: But when new properties came to us that needed to be left, there's been particular rooms as well, there wasn't so many people moving.
37:07
SPEAKER_00: At the start of this year, much the same, if not lower, the amount of people that were moving as well.
37:14
SPEAKER_00: So I was like, right, okay, what's going on here?
37:17
SPEAKER_00: Now, lots of different contributing factors, and people say to me, Oh, Ted's got no idea what this renter's rights act.
37:24
SPEAKER_00: Yes, they do.
37:26
SPEAKER_00: Because it's the Renters' Rights Act.
37:29
SPEAKER_00: They have more tools in their tool kit now, and landlords have less tools.
37:35
SPEAKER_00: Wow, June.
37:37
SPEAKER_00: All of a sudden it was like someone lit the bonfire.
37:42
SPEAKER_00: Lots more people moving.
37:45
SPEAKER_00: They knew what the situation was.
37:47
SPEAKER_00: And the amount of inquiries has, yes, as a business owner, I was delighted.
37:53
SPEAKER_00: Landlords, in some cases, not quite so, but as far as new, shiny new property landlords, they were delighted.
37:58
SPEAKER_00: So, yes, the marketplace has become.
38:02
SPEAKER_00: I will say now, having come into September, it's a little gone, it's slowed down a little in comparison with the crazy we've had the last two months.
38:09
SPEAKER_00: Um, or two or three months, in fact.
38:12
SPEAKER_00: So, on that basis, you know, people thinking, oh, there's gonna be loads of people moving, loads of people giving notice.
38:19
SPEAKER_00: We haven't so much noticed that.
38:21
SPEAKER_00: There's just been more inquiries of new tenants that are coming to us for the properties that we've got.
38:26
SPEAKER_00: So lots of positives on that.
38:28
SPEAKER_00: Because I know people thinking, oh, they can give two months' notice.
38:32
SPEAKER_00: We've had one person that moved in all in May.
38:36
SPEAKER_00: I says, I want to give one month's notice.
38:39
SPEAKER_00: You can't.
38:39
SPEAKER_00: You need to give two months' notice.
38:42
SPEAKER_00: So, on that basis, people having short-term tenancies, that's not been the case.
38:46
SPEAKER_00: It's not been much.
38:46
SPEAKER_00: And what we have incorporated into our T's and C's is that should it be a tenant stays less than six months, we are then charging them less for the next tenancy set up, basically.
38:55
SPEAKER_00: So we're incorporating that side of things.
38:58
SPEAKER_00: So that's the letting side of things.
39:00
SPEAKER_00: Rents are going up still, not at the crazy rates they were a year or two ago, but they're still going up at a good rate.
39:07
SPEAKER_00: And a way that I always say to my landlords is that, oh, I don't want to.
39:13
SPEAKER_00: No, you're not giving them it cheap each, you're just giving them a reality check of that's the way the market's going.
39:18
SPEAKER_00: And if anything, you'll get you're increasing it less than it would be if they moved somewhere else.
39:22
SPEAKER_00: So don't worry about that side of things.
39:23
SPEAKER_00: So if they went somewhere else, it may have got£50, whereas you're putting it up by£35.
39:28
SPEAKER_00: So don't be worrying about that side of things.
39:30
SPEAKER_00: And if you don't, and I hear so many landlords not increasing their rent, that's a bad thing because you're not giving the reality check, and it will come to the point at which you need them to move out because you're selling or whatever it may all be, and you're gonna have to go through what's it called, getting the courts involved, getting back possession order, then bailiffs, because they'll be looking elsewhere, they're seeing that the rent is far higher than you've been charging them.
39:54
SPEAKER_00: I can't afford that.
39:57
SPEAKER_00: Yeah, brushing bird.
39:59
SPEAKER_00: So, as far as investors coming to me and selling, so I I I expanded on a little bit earlier on.
40:06
SPEAKER_00: So a lady that's owned her property since probably 2000, a similar sort of period when my dad started buying his properties, and he's now selling them off one by one with the ability you can do that one by one from capital gains or whatever you go with it.
40:19
SPEAKER_00: She's got bed sits, maisonets, uh, flats.
40:25
SPEAKER_00: So, for example, two one-bedroom maisonettes, and you're just like, right, or two bedroom maisonettes and getting six, seven hundred pounds.
40:34
SPEAKER_00: And I've done the analysis.
40:36
SPEAKER_00: I'm like, you return an investment based upon a buyer buying that with tenants in situ.
40:41
SPEAKER_00: Hmm.
40:42
SPEAKER_00: Not for me, but she's got six or seven.
40:45
SPEAKER_00: Now, one thing she did have, she had a property in Earlsden in a premium location that was getting okay rent.
40:52
SPEAKER_00: I says, but realistically, a buyer is not going to buy it with tenants in situ, it's not gonna happen because the numbers are rubbish.
40:59
SPEAKER_00: I says, but if you sold that with because there's a potential buyer, like the gentleman who's got another one up there with tenants in situ, and I'm saying to him, you need to do vacant possession.
41:09
SPEAKER_00: You can offer it both angles, because you've got you're opening the bot up, opening it up to an investor, you may well say, Yeah, okay, we'll keep them.
41:15
SPEAKER_00: Or realistically, but you give them that option.
41:18
SPEAKER_00: So you're opening up the market because if you're just selling to investors, it's a much smaller market in comparison to selling to resident buyers, in particular in premium location, if you're looking to get a good price.
41:28
SPEAKER_00: If you're selling to investors, they're gonna drill you down.
41:31
SPEAKER_00: Um, it depends how motivated you are.
41:33
SPEAKER_00: I know with auction properties that we've been doing because we've we've paired up with town and country as far as auctions.
41:38
SPEAKER_00: I look at the avatar of the vendors.
41:42
SPEAKER_00: For example, unfortunately, a gentleman who'd lost his daughter and she owned the property, gone through probed, just wants rid.
41:48
SPEAKER_00: A gentleman who's changing his personal circumstances, doesn't live in the area, just wants rid.
41:54
SPEAKER_00: Um, a gentleman who had a property with the lease that was at 70 years just wants rid.
42:00
SPEAKER_00: That was the motivations there.
42:02
SPEAKER_00: Whereas you can see different avenues, but the marketplace is still plenty of buyers out there at the right price, but you may need to open your angles of rather than just an investment salad to residents that are going to buy in those areas.
42:16
SPEAKER_00: Um, and some people's aspirations of buying bigger properties may or they may reduce that.
42:20
SPEAKER_00: So first-time buyers buying Masonet, studios, flat, small flats, is the angle.
42:28
SPEAKER_00: That's that's the way I've portrayed it to her yesterday.
42:31
SPEAKER_00: So I've got a yes, seven best price guides, seven return and investment calculations, all these different things.
42:38
SPEAKER_00: She's got everything now in the meanwhile.
42:40
SPEAKER_00: So she's she got that at half past nine yesterday evening once I've got it all finished.
42:44
SPEAKER_00: But yes, that there are investors now coming to me with these positions.
42:48
SPEAKER_00: But what I'll say to you is, you've had your money, just let it go now to get a reasonable price so you get your 25% back as far as your deposit is concerned, if that's the land loan to value you've got on.
43:02
SPEAKER_01: Well, I think you hit the nail on the head.
43:04
SPEAKER_01: That's where the market is at the moment.
43:05
SPEAKER_01: You know, it's it's not a booming market at the moment.
43:08
SPEAKER_01: So if you are looking at cashing in, then you've got to be realistic and sensible with it.
43:12
SPEAKER_01: The problem is there won't be other like agents like your company, keep it real.
43:16
SPEAKER_01: There'll be other agents out there saying, No, no, no, you should be getting this, you should be getting this, because they're still thinking about prices that were there a couple of years ago.
43:22
SPEAKER_00: If you're selling a tenanted property, the rent won't just you do the stress tests.
43:26
SPEAKER_00: Yeah, exactly.
43:27
SPEAKER_00: So simple, just like a Jackson was trying to sell his property that won't no one allow to buy it because he's got tenants in there without license and planning.
43:37
SPEAKER_00: There you go.
43:38
SPEAKER_01: But that's one of the things to watch out for as an investor as ourselves is to making sure that we do our own due diligence on things.
43:44
SPEAKER_01: And there are a lot of HMOs that the councils have brought in.
43:47
SPEAKER_01: We've talked about it before, you know, minimum room sizes.
43:50
SPEAKER_01: Yeah, now some of the rooms aren't the right size.
43:52
SPEAKER_01: So when you actually go for reapplying to the license, yeah, you think, well, I've got grandfather rights and all of that, but you're now not compliant to the rules and regulations.
44:00
SPEAKER_01: So some landowners are like, well, I'll start this off and hopefully they won't notice.
44:03
SPEAKER_00: Some some I know I there's been there was one occasion who had a two up, two down property and made it into a three-bed HMO.
44:11
SPEAKER_00: And he got I don't know who visited first, but he got the five-year licence, no worries at all.
44:19
SPEAKER_00: And he goes, Fine, it's now coming to the renewal.
44:21
SPEAKER_00: May do the application, all fine.
44:23
SPEAKER_00: The inspector comes out and says, Right, your kitchen is not big enough.
44:28
SPEAKER_00: It's only seven metres and it needs to be X amount because your rooms aren't 10 metres squared.
44:33
SPEAKER_00: I think it needed to be uh 18 metres squared needs to be your lounge and your kitchen, but your kitchen needs to be a minimum of X.
44:40
SPEAKER_00: It's like, right, so what don't we do?
44:42
SPEAKER_00: He said, Well you need to extend it.
44:45
SPEAKER_00: He's like, Why would you do that?
44:47
SPEAKER_00: He said, Well, you know, if you want to have a HMI, so he just said, Right, okay.
44:53
SPEAKER_00: I need you to let me give me parti sufficient time to get my tenants out of the property and I'll add it to a family.
44:58
SPEAKER_00: And this is where three-bed HMOs and letting to families, the numbers are tightening, and particularly if you were doing in bills inclusive.
45:08
SPEAKER_00: If you do it, three mates, then yeah, the numbers are still quite good.
45:10
SPEAKER_00: But if you're buying as a new buyer, the numbers don't add up, don't get anywhere near.
45:14
SPEAKER_00: So that's the route you have to go down.
45:15
SPEAKER_00: So I'm not extending a blimmer kitchen, spending 10,000, 20,000 pounds just so I can have my license.
45:22
SPEAKER_00: I'll just let it to the family then.
45:24
SPEAKER_00: And since that point, he's then yeah, been very happy with the long-term family that are in there.
45:28
SPEAKER_00: Lovely.
45:28
SPEAKER_01: That's it.
45:29
SPEAKER_01: That's good.
45:30
SPEAKER_01: I would like to say thank you ever so much.
45:32
SPEAKER_01: Uh well knowledge in this session.
45:35
SPEAKER_01: Uh amazing.
45:38
SPEAKER_00: We can have good chats because it means that we've we've, you know, uh there's there are current marketplace subjects that are happening now.
45:46
SPEAKER_00: Obviously, I can do some education bits and bats, but they can be a bit boring sometimes.
45:51
SPEAKER_00: So if we're just and I can just explore different avenues of different bits, it's yeah, basically we're interested.
45:55
SPEAKER_01: Well, that's it, that's it.
45:56
SPEAKER_01: No, I'd really appreciate it as well, as well as the community will and everything.
46:00
SPEAKER_01: It's great to you know talk about current things as well, keeping it real.
46:03
SPEAKER_01: You know, there are pluses, there are minuses with everything.
46:06
SPEAKER_01: We've just got to make sure that if we're investing, we're investing with the right knowledge and we're making sure that we are abiding by the rules.
46:13
SPEAKER_01: And that is the main thing.
46:14
SPEAKER_01: You know, I always harp on to everybody I speak to.
46:17
SPEAKER_01: It's about being a property professional now.
46:19
SPEAKER_01: If you want to do this, you can't be a hobbyist anymore.
46:22
SPEAKER_01: You've got to be a professional when it comes to this.
46:24
SPEAKER_01: And that means either knowing the ins and outs of things or having, as we always say in your power team, people that you can turn to to ask about these things as well.
46:32
SPEAKER_01: Because none of us know everything, but we know what we're good at.
46:36
SPEAKER_01: So make sure you're surrounding yourself with the right people.
46:38
SPEAKER_01: Any any final thoughts on today, mate?
46:43
SPEAKER_00: It will get better, but property in a lot of cases, it's not short term.
46:48
SPEAKER_00: Don't go thinking you're gonna get your quick hit.
46:50
SPEAKER_00: Even if it's a flip, you're gonna be waiting six, seven months, maybe even twelve months.
46:53
SPEAKER_00: I'd probably put on a more of a mindset of a 12-month turnaround on a flip than a um six months.
46:58
SPEAKER_00: But in the long term, hey, and but it it's yeah, it the property is always a good investment as long as you do your due diligence on a property and it's it's the right property.
47:08
SPEAKER_00: And even if you are making six percent on a new investment, that asset will grow in value in the next 10 years.
47:15
SPEAKER_00: Make some pocket money out of it now, look after it.
47:18
SPEAKER_00: It's an asset that in 10 years' time you may well be able to sell and make£100,000 out of it, but for the time being, you've got an asset, and otherwise, it'll get spent on holidays or cars or things that aren't going to be anything worth properties.
47:32
SPEAKER_00: It's locked in.
47:32
SPEAKER_00: You've locked it in.
47:34
SPEAKER_00: That's it.
47:34
SPEAKER_00: Keep it, look after it, and it will do you good in the long term.
47:39
SPEAKER_01: It's all about being an investment at the end of the day.
47:41
SPEAKER_01: That's what property is, it's an investment.
47:43
SPEAKER_01: So investments go up, investments go down, deal with it.
47:47
SPEAKER_01: Don't worry about 0.2 blimming percent reduction in price.
47:50
SPEAKER_00: Who gives a flying what's it?
47:52
SPEAKER_00: Oh, yeah.
47:54
SPEAKER_00: Yeah, don't worry about that.
47:55
SPEAKER_00: Don't worry about that.
47:56
SPEAKER_01: No, that's brilliant, mate.
47:57
SPEAKER_01: Thank you ever so much.
47:58
SPEAKER_01: Great to see you, and we look forward to seeing you again next month.
48:01
SPEAKER_00: Yes, we should be happy to have Allison back next month with us with the turbus here next month for us.
48:05
SPEAKER_00: You'll have uh two ugly mugs for you for next month as well.
48:08
SPEAKER_01: Oh, brilliant.
48:08
SPEAKER_01: Thank you very much.
48:09
SPEAKER_01: Take care, my man.